Mary Meeker has just released her almost iconic annual “Internet Trend” report. In it (on slide 7), she points out that 88% of the smartphone OS share is now “made in USA”. Now, this might be good for the patriotic US soul but it signifies a much more important thing and that is the shift from carrier control to platform control. If you are an EU politician, you may lament that the current winners are from North America, but the fundamental shift does not actually depend on it (there will be Canada on the map next year again, and we may well see some Asia-led one, too).
The forced break-up by Apple
The introduction of iOS by Apple moved the access to the ultimate customer, the end user, from carrier to platform owner. With hindsight, carrier execs are probably pulling their hair out that they allowed this but they were falling all over each other when Apple came out with its shiny iPhone back, when?, in 2007.
This introduced a monstrous disruption in the telecoms industry as it marked a move from where carriers could dictate what they would or would not allow over their networks to being virtually at the mercy of the platform owners. It was, however, less about the shiny devices (though it helped their market cap to untold heights) but more about the platform approach. And therefore, Apple was, of course, quickly joined and then swiftly overtaken by Android. Today, they now rule the roost (though Apple is fast falling behind).
The Power of (Somewhat) Open Systems
Seen from today, a lot of criticism of the early leader, Apple, is centered around closed systems. People complain that iOS is too restrictive and does not allow them to do what they want to do (take any number of services, be it iCloud, iMessage, Game Center or anything else – they only function on Apple devices). Alas, back in 2007, that didn’t sound so bad. Because, you see, back then there was a) hardly any interaction and b) the one there was was restricted in “my” (haha) carriier network. But then, who cares, right? My friends are on any number of networks, and they change frequently, too. The carriers, however, thought that they could tie people in. Hell, some even thought they could become cool (anyone remember Vodafone Live!?). But that should not happen. And therefore the world changed.
Then came Android and, with it, the ability to dip into an even larger ecosystem, namely Google’s. I mean, who doesn’t use them, right? And with their “don’t be evil” motto, they took it up another notch. The Apple users were thenceforth fanboys and irrational, high-spending hipsters. Proper geeks would go with Android. Now though Google also starts showing signs of wanting to rule the world. The don’t be evil thing hasn’t been heard for some time…
The Next Step?
And if you go through Ms Meeker’s deck a little further, you’ll find a lot of slides where Sina Weibo, Tencent, Amazon, eBay, etc feature. And you know what? Neither those companies nor their users give a toss whether the service is being delivered on iOS, Android, BlackBerry 10 or otherwise. They just want their service. And this is the challenge the current platform owners have (and it might sound vaguely familiar to the one carriers had): how to keep your users tied into your platform? It started of on the “it’s easier, better, simpler” lure. However, on most both iOS and Android people now start to realise that that might not be so: why does Google force me into a Gmail account (or is it Google+ now?) in order to get the most out of my shiny new phone? Why does Apple not allow me to share XYZ with my friends independent of what handset system they choose to use? This, incidentally, is why it makes insane sense for BlackBerry to release its BBM solution across other operating systems, too… (but this will be the only corporate plug today).
In short, when you look at the overall ecosystem, people want Facebook, Twitter, Sina Weibo, Line, Snapchat, Instagram, YouTube, LinkedIn, Skype, WhatsApp, you name it. They don’t really care where. Does this sound familiar? The first iPhone users went to AT&T because they were it was the only carrier that had it. Today, they’d scoff at a carrier that doesn’t have it (just ask Sprint, they allegedly struck a [too?] rich deal to get it).
What this means is that, in the (near) future, it will be less about operating systems (come on, who cares about them?) but more about actual applications. So what’s the winning one? Facebook? Twitter, Skype? I’d argue there’s more to come. We’ve heard of Line, Kakao. So what about Alibaba (check slide 69 on Ms Meeker’s deck), or Tencent’s We Chat (slide 65)? It is services and products users crave. These are platforms all right! The only reason they went for the platform owners was that they had better access routes than the (previous) incumbents. Now though they might have called in old Goethe’s Faust:
Do you not see the ghosts I’ve called?
Came in the night when I was asleep.
Here in the dark far too big.
The ghosts I’ve called won’t let me go.
So then, dear friends, what next?